New Law Enables Affordable and Accessible Retirement Plans for Nonprofits

Editor's note: the following is from a press release from the Governor's office.

Governor Deval Patrick signed into law legislation on Thursday that will enable small nonprofits to leverage their collective power to purchase affordable and accessible retirement plans. 

In Milton, there are 205 nonprofits, according to the watchdog agency, Guidestar.org.

“Nonprofit professionals are part of every aspect of our lives.  They educate us, keep us healthy, take care of the underserved and protect our cultural, historical and environmental treasures,” said Rick Jakious, CEO of the Massachusetts Nonprofit Network. “This law is important because it takes care of the nonprofit workers who take care of the Commonwealth.”

The nonprofit sector represents a significant portion of the Massachusetts economy, providing over 455,900 jobs and employing 16.7% of the workforce, according to a 2011 study by the Center for Civil Society Studies at the Johns Hopkins Institute for Policy Studies. A 2009 study by the Boston Foundation, however, found that only percent of small nonprofits provide retirement savings options for their employees.
 
“In too many cases, nonprofits simply haven’t had the resources to administer an affordable deferred compensation plan for their employees, resulting in countless people being isolated from a safe and secure retirement.  That changes today,” said state treasurer Steven Grossman.  “Nonprofit workers provide important services that reach underprivileged and struggling segments of our population, and this new law will incent thousands of people to continue that critical work.”
 
The legislation was a top legislative priority for the Massachusetts Nonprofit Network and was championed by treasurer Steve Grossman and the original bill sponsors, Representative Garrett Bradley and Senator Jack Hart.  It allows for the creation of defined contribution plans for nonprofit employers with no more than 20 employees and specifically authorizes the State Treasurer’s office to create and oversee such a plan.  The Treasurer’s plan will be modeled on the state’s Save Money and Retire Tomorrow Plan, making an affordable and accessible option available to small nonprofits at no further cost to the state.
 
“This law makes it a little easier for the average employee of a small nonprofit, whose contribution to society far exceeds his or her modest salary, to invest in a secure and comfortable future,” said David Shapiro, MNN Board Chair and CEO of MENTOR.